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Should Trump 'Unleash' Wall Street?

Feb 16, 2017

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LOVINGSTON, VIRGINIA - Stocks show little movement. Investors are waiting for something to happen.

And wondering...

Corporate earnings have been going down for nearly three years. They are now about 10% below the level set in the late summer of 2014.

Unleashing Wall Street

Why should stocks be so expensive?

Oh, yes...because the Trump Team is going to light a fire under Wall Street.

But they must be wondering about that, too.

Raising up stock prices - as we've seen over the last eight years - is not the same as restoring economic growth and family incomes.

And as each day passes, the list of odds against either seems to be getting longer and longer. As the petty fights, silly squabbles, and tweet storms increase, the less ammunition the administration has available to fight a real battle with Congress or the Deep State.

Still...

'Goldman Stock Hits Record on Bets Trump Will Unleash Wall Street,' reads a Bloomberg headline.

Goldman Sachs is a pillar of the Establishment, with its man, Steve Mnuchin, heading the Department of the Treasury. So a win for Goldman is not necessarily a win for us.

'Unleashing' suggests a win-win deal, as in allowing the financial industry to get on with its business. But there are different kinds of 'unleashings'.

Some things - like Dobermans - are kept on a leash for a good reason. Unleashing the mob...or a war...might not be a good idea, either.

Untying Wall Street from bureaucratic rules is at least heading in the right direction. But it will only benefit the Main Street economy if Wall Street is doing business honestly, facilitating win-win deals by matching real capital up with worthy projects.

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Deep State Industry

That, of course, is what it is NOT doing. It is a Deep State industry aided and abetted by the Fed's fake money.

The 'capital' (really, money out of thin air) it helps allocate is fraudulent...provided to the elite at preferential rates by the Fed banking cartel. That leads to a whole host of fraudulent transactions, losing propositions, and win-lose deals.

The public has to borrow money at twice the interest rates of the elite in business, finance, and government. Why? The risk is lower.

If Goldman or GM gets into financial trouble - even with their favored lending rates - the feds bail them out. If the man in the street is unable to pay his mortgage, he loses his house.

This unfairness is at the heart of today's economic system.

It's also the source of the discontent felt - but maybe not fully understood - by the masses and the current administration.

Fraudulent System

The typical household has less earned income today than when the century began. It should have been the biggest, most successful period in human history.

Why are American wages sagging?

After all, the number of patents has exploded. So has the pace of technological innovation. The number of people with advanced college degrees, too.

Meanwhile, the feds have pumped $37 trillion in excess credit - above and beyond the traditional relationship between debt and GDP - into the system over the last 30 years.

And corporations are more flushed with cash than ever before...

So, how come an economy with more technology than ever before...with more trained workers than ever before...with more 'capital' available than ever before...

...lowers household incomes...grows at only roughly half the rate of the 1960s and 1970s...and registers the weakest 'recovery' in history?

How come?

Globalisation, Mexico, regulation, China, automation, inequality, financialisation - they all have been blamed. But you know the real answer: because the money system is counterfeit.

It benefits the elite of Washington and Wall Street but not the rest of us. And 'unleashing' Wall Street - without a return to honest money - means allowing this Deep State beast to prey even more on average Americans.

Regards,
BILL BONNER Founder, Agora Inc
Bill


Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

Disclaimer: The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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1 Responses to "Should Trump 'Unleash' Wall Street?"

subramaniam

Feb 16, 2017

I always read with great interest the opinions of Vivek. Tome it is Viveka call(wisdom's call) the article on the increasing idle investments of banks in MMs and the impact on currency velocity, the unfairness of banks in robbing retired peters to pay the defaulter paul,are lucidly explained

Hope the imprudent ways of banks which would cause great damage to the consumption story is corrected by the Govt

The insignificant base rate reduction and the steep drop in FD interests are eroding the savers disposable income. This cannot pump prime the economy.

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